Peru can weather new financial storms -Baca
Reuters, Thursday, September 03, 1998 at 22:24
WASHINGTON, Sept 3 (Reuters) - Peru feels no pressure to
intervene in foreign exchange markets to devalue the sol and is
in a better position than most of its neighbors to withstand
any new regional financial crunch, Finance Minister Jorge Baca
said Thursday.
Reporters asked Baca if Peru might intervene to devalue its
free-floating sol currency, which has already depreciated
sharply in recent weeks.
"On the contrary," he said. "We've seen that Peru is one of
the outstanding countries in the region because we have a zero
deficit, we have a free exchange rate, and solid and prudent
exchange rates."
Speculation about major currency devaluations in Latin
America has heightened with financial turmoil in Russia and
with Colombia's de facto devaluation of its peso on Wednesday.
Baca said that speculation about devaluations had centered
on Brazil "because it has a fiscal deficit, and in the case of
Venezuela for obvious reasons."
But the conditions that might call for devaluation in those
countries do not apply in Peru, he told reporters after a
meeting of top Latin American financial officials with
International Monetary Fund leaders and U.S. Treasury Secretary
Robert Rubin.
"We are not Russia. We are in perfectly good condition to
pay and service our (foreign) debt, not just now but in the
future, because we are applying the correct fiscal measures,
and for that reason we should be differentiated from the
others," he said.
But he said no Latin American country expressed any
problems with paying or servicing its debts during the day-long
meeting at the IMF.
He said global financial turmoil would not affect Peru's
economic growth forecast of 3-4 percent for this year, a rate
which was already down from 5 percent because of damage to
fishing and other sectors from the El Nino weather phenomenon.
"We are quite certain that the forecasted growth level is
correct ... of between three and four percent for the year," he
said.
Economists at various investment banks have forecast lower
growth rates this year, at closer to two percent, but Baca
those studies were not taking enough into account strong growth
in the fishing and agriculture sectors.
+1 202 898-8383, washington.economic.newsroom@reuters.com))
Copyright 1998, Reuters News Service
|
